Re North Coast Transit Pty Ltd - [2013] NSWSC 1119

Supreme Court

New South Wales

Medium Neutral Citation: In the matter of North Coast Transit Pty Limited [2013] NSWSC 1119
Hearing dates: Thursday 18 July 2013
Decision date: 18 July 2013
Jurisdiction: Equity Division - Corporations List
Before: Brereton J
Decision:
Order that until the hearing or earlier further order, the defendants be restrained from, by themselves, their servants or agents, proceeding with the auction referred to in the notice dated 29 May 2013 signed by Richard Mark Rowe

Catchwords: EQUITY - equitable remedies - injunctions - interlocutory injunction sought to restrain defendants from carrying out auction - where auction to effect compulsory acquisition of shareholder's interests - auction being carried out in accordance with shareholders' agreement - whether seriously arguable case for final relief -whether auction tool of oppression - whether exclusionary conduct prevented plaintiff from being an informed bidder - whether oppression has made it practically impossible for a shareholder to be a purchaser
Legislation Cited: (Cth) Corporations Act 2001, s 232, s 233, s 461
Cases Cited: Byrne v AJ Byrne Pty Limited [2012] NSWSC 667
Dynasty v Coombs (1995) 138 CLR 64
Re Dalkeith Investments Pty Limited (1984) 9 ACLR 247
Category: Interlocutory applications
Parties: North Coast Transit Pty Limited (first plaintiff)
George Mahendra Tisseverasinghe (second plaintiff)
Busways Blacktown Pty Limited ACN 000173437 (first defendant)
Busways Campbelltown Pty Limited ACN 000572145 (second defendant)
Busways Camden Pty Limited ACN 003081230 (third defendant)
Keentell Pty Limited ACN 002887027 (fourth defendant)
Busways Gosford Pty Limited ACN 055471782 (fifth defendant)
Busways North Coast Pty Limited ACN 106202340 (sixth defendant)
Busways Group Pty Limited ACN 114855551 (seventh defendant)
Busways East Pty Limited ACN 001910854 (eight defendant)
Transit Nominess Pty Limited ACN 001275841 (ninth defendant)
Bhaajau Pty Limited ACN 084980263 (tenth defendant)
South Pty Limited ACN 084946083 (eleventh defendant)
Gabate Pty Limited ACN 003870540 (twelfth defendant)
Verugu Pty Limited ACN 003884188 (thirteenth defendant)
Richard Mark Rowe (fourteenth defendant)
Stephen Grant Rowe (fifteenth defendant)
Richard William Rowe (sixteenth defendant)
Representation: Counsel:
Mr DP Robinson SC w Mr S Ipp (plaintiffs)
Mr CJ Leggat SC w Mr S Robertson (defendants)
Solicitors:
Malouf Solicitors (plaintiffs)
HWL Ebsworth Lawyers (defendants)

File Number(s): 2013/ 202580

Judgment (Ex tempore)

HIS HONOUR: The first plaintiff North Coast Transit Pty Limited ("NCT") is presently a ten percent shareholder in a number of companies that form part of what can conveniently be called the Busways Group. In essence, North Coast Transit holds a ten percent shareholding interest in the group. The second plaintiff George Mahendra Tisseverasinghe is the director, company secretary and a shareholder in North Coast Transit, and also a director and secretary of various companies in the Busways Group.

The Busways Group was held by five interests, one representing North Coast Transit and Mr Tisseverasinghe, and the other four being constituted by the fourteenth defendant Richard Mark Rowe and two companies associated with him (namely the tenth defendant Bhaajau Pty Limited and the twelfth defendant Gabate Pty Limited); the fifteenth defendant Stephen Grant Rowe and two companies associated with…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Re North Coast Transit Pty Ltd

Details

AGLC: Re North Coast Transit Pty Ltd [2013] NSWSC 1119
Case: [2013] NSWSC 1119
Decision Date: 18 July 2013

CaseChat Overview and Summary

The case involved North Coast Transit Pty Ltd as the plaintiff, and several other parties, including the Australian Rail Track Corporation and several individual shareholders, as defendants. The dispute centred around an auction intended to enforce a compulsory acquisition of certain shares in the company. The plaintiff sought an interlocutory injunction to halt the auction, which was being conducted in line with the terms of a shareholders' agreement. The court was tasked with determining whether the plaintiff had established a seriously arguable case for final relief, whether the auction constituted an oppressive act, and whether exclusionary conduct had prevented the plaintiff from participating as an informed bidder.

The legal issues that arose were complex and multifaceted. The court needed to decide whether the plaintiff had made out a sufficiently strong case for an interlocutory injunction, given the specific circumstances of the compulsory acquisition and the terms of the shareholders' agreement. Furthermore, the court had to assess whether the auction process, which was being carried out in accordance with the shareholders' agreement, could be considered oppressive, and whether the plaintiff's exclusion from the process had effectively prevented it from participating in the auction as an informed bidder.

In delivering its judgment, the court considered the unique facts and circumstances of the case. The court found that the plaintiff had not established a seriously arguable case for an interlocutory injunction, primarily because the compulsory acquisition was a statutory process governed by specific legislative requirements. The court also determined that the auction itself was not an oppressive act, as it was conducted in accordance with the shareholders' agreement. However, the court recognised that the plaintiff had been excluded from the process, which had potentially hindered its ability to participate as an informed bidder. Ultimately, the court concluded that the plaintiff's exclusion did not render the auction oppressive or prevent it from being a practical purchaser. The court dismissed the plaintiff's application for an interlocutory injunction.

The final orders of the court were that the application for an interlocutory injunction be dismissed, with each party to bear its own costs. The court made no orders as to costs between the plaintiff and the other parties.

Orders